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Income Tax on Bonds
pauldreed
Posts: 222 Forumite
I have a mixture of Bonds and Equity Funds in a Portfolio, and which I hope to transfer some over into an ISA in April and wondered which should be prioritised for moving into the ISA.
I don't draw an income from any of the investments, but have read somewhere that UK Bonds attract Income Tax, and therefore should be prioritised?
I can't find the article now, but is that so?
I don't draw an income from any of the investments, but have read somewhere that UK Bonds attract Income Tax, and therefore should be prioritised?
I can't find the article now, but is that so?
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Comments
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but have read somewhere that UK Bonds attract Income Tax, and therefore should be prioritised?
Not quite that but you are looking the right way.
Equities cannot claim back the tax on income paid within an ISA. However, interest paying funds can. That typically means your fixed interest securities/bonds. i.e. corporate bonds. So, yes, it does make sense to keep your fixed interest portion of your portfolio within the ISAs.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
You have thrown me with the term 'fixed interest', my corporate bond funds are Invesco Perpetual Global Bond and M&G Strategic Corporate Bond. Do you class these as fixed interest?Not quite that but you are looking the right way.
Equities cannot claim back the tax on income paid within an ISA. However, interest paying funds can. That typically means your fixed interest securities/bonds. i.e. corporate bonds. So, yes, it does make sense to keep your fixed interest portion of your portfolio within the ISAs.0 -
You have thrown me with the term 'fixed interest', my corporate bond funds are Invesco Perpetual Global Bond and M&G Strategic Corporate Bond. Do you class these as fixed interest?
Yes. They are fixed interest securities.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Is the tax claimed back automatically from within the structure of the ISA wrapper for fixed interest securities, or does the investor have to apply for it via a tax return or some other way?0
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The ISA provider will claim the tax back for you. You have to do nothing.0
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How do you do that?cheerfulcat wrote: »...except checking that they've done it!
(I've never had a Stocks & Shares ISA before)0 -
sunnyyorkshire wrote: »How do you do that?
(I've never had a Stocks & Shares ISA before)
Check your statements.0 -
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The statements provided by the organisation running your ISA.
They will show the tax reclaims made on the income from the fixed interest securities.
If they have failed to make reclaims on your behalf they wont be shown!0
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